Tag Archives: spending

I knew that marriage-is-good-for-the-economy thing sounded familiar

When I wrote the other day about Brad Wilcox’s “Strong Families, Prosperous States” report, I forgot about a conceptually similar foundation-money spoof he produced four years ago which claimed, among other things, that “Strong, sustainable families pay long-term dividends to the entire economy.” (It was part of a report that included such recommendations as “Clean up the culture” and “Respect the role of religion as a pronatal force.”)

One of the conclusions of Wilcox’s new report is that states with more married couples have higher household income than states with fewer married couples. Hm. I realize now that’s building on the report he wrote four years ago, basically saying that marriage makes households spend more, so Proctor and Gamble is excellent. I wrote about it here, but hardly any of you were reading back then, so here is an edited rehash:

Farce or fraud?

Did you know that married couples with children spend 50-times more on childcare than single adults without children? Well, if you didn’t you might not realize how good marriage is for “the economy.”

Brad Wilcox and Kathryn Sharpe have a contribution in the Bradley Foundation-funded report, “The Sustainable Demographic Dividend,” which aims to describe the benefits of marriage for the economy.

What they do is produce a simple table showing that married-couple-with-children households spend more on various things than single-childless households. If you’re thinking, “but there are more people in married-couple-with-children households,” then you may already have done more thinking than the report’s authors.

To explain why this spending pattern occurs, they offer several reasons, the first of which is “household size.” Wait — you’re still thinking — if household size explains the difference in spending, then it’s not a difference in spending, it’s a difference in accounting, just pooling the spending of several people and calling it a spending increase. So how does this help “the economy”? Believe it or not, this is their reasoning:

To serve the needs of all the adults and children in their homes, they are more likely to buy many brands in bulk, from Bounty to Tide, and to fill their shopping carts at the local grocery store.

I must be doing something wrong, because I thought I spent less in the end when I bought in bulk. (But then again, I’m apparently not as good at raising money from giant foundations, either.)

The data abused in this report are from the Consumer Expenditure Survey, which is the authoritative source on household spending in the U.S. It’s something I’ve used before to study household spending (here and here). And if you use it, all I can say in a sentence is: you better account for household size, since all the spending is reported for households, not individuals.

To illustrate this, I did a simple manipulation of the data in Wilcox and Sharpe’s report. They list average spending on specific categories for households according to family structure. Yes, households. Here is a taste of the table:

oldwilcoxtable

This shows, for example, that single-childless households average a paltry $1.40 per week on cereal, compared with a robust economic contribution of $4.44 for married-with-children households. This doesn’t just mean children are good for “the economy,” because single parents spend only $2.86. So spouses are good for “the economy” too.

Or, maybe this just means people eat cereal.

I took the data from their list and compared married-with-children households to the sum of single-childless and single-parent households. On average, if every adult buys one beer a day, and every child buys one glass of milk, then the level of spending in married-with-children households should be the same as the sum of spending in single-childless plus single-parent households (if they have the same number of children). This is not serious consumer science, but it’s appropriate for a blog-scale debunking. And the results:

This graph is for weekly expenses on small consumer items;* the graph for bigger ticket items looks about the same. If the dots fell along the dotted line, my beer-and-milk hypothesis would be supported. It’s pretty close — but tipping a little the way you would expect it to — toward bigger households spending less, since they have economies of scale (“buying in bulk”).

Anyway, the analysis is junk. But the more interesting question is: Is this farce or fraud? Maybe they really don’t know what they’re doing, in which case the foundation funding makes it a farce. Or maybe it’s fraud.** Maybe they are deliberately misleading the public, the foundation, and the major corporations they are hoping will spend their “philanthropy” money on such “public education” projects.

Actual recommendations:

Companies whose fortunes are linked to the health of the family, such as Procter & Gamble, spend billions of dollars each year on advertising. … Executives with oversight across brands should ask themselves a simple question: Do the messages used in our advertising make family life look attractive? Or do they exalt single living? Obviously, it’s in their long-term interest to do more of the former.

If you have another 3 minutes, consider watching this hilarious video they link to as an example of “family life = attractive.” It’s from Proctor & Gamble’s 75th anniversary in the Philippines (unless it’s a spoof, too), which includes images like this:

2015 Population addendum

Of course, people spend more than things that aren’t people, so population growth spurs economic growth. But not all economic growth is the same, because, for example, people without incomes create less “demand” (because they “choose” not to consume as much). As I explain in this one-minute animated video, rich families spend a lot more on their kids than poor families do. Is that waste, or economic stimulus? The answer might affect whether we want to take money from rich people and give it to poor people to spend on their kids, or coerce poor people into having fewer kids, or coerce rich people into having fewer kids — or convince rich men to marry poor women. My guess is that, if you want more people to grow the economy (which is not an unambiguously good thing, but for argument’s sake), the most efficient thing would be to get poor people to have more kids and then train those kids to be high-skilled workers. Also, allowing more poor people to immigrate. Probably getting rich people to have more kids and spend more on them is not as good, because there is so much waste on rich kids. But I could be wrong.

Anyway, none of this that I can see suggests much influence of “marriage” on the economy, and if it did I wouldn’t want the state to be promoting marriage anyway. If Proctor and Gamble wants to promote marriage, that’s fine, as long as they’re taxed at a sufficiently high rate, too.

* cereal, baked goods, beef, pork, other meat, poultry, seafood, eggs, dairy, fresh fruit, fresh veggies, processed fruit, processed veggies, sweets, non-alch bevs, oils, misc. food, alchohol, tobacco, personal care products and services, and household products and services.

** colloquial use of the term “fraud” in this blogosphere context is not meant to express or imply legally criminal fraud.

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Filed under In the news

Marriage promotion, farce or fraud?

Sometimes I wonder if the National Marriage Project is just gaslighting me.

Did you know that married couples with children spend 50-times more on childcare than single adults without children? Well, if you didn’t you might not realize how good marriage is for “the economy.”

The other day I discussed a bizarre essay and the naive NPR report promoting it. I saved for today the additional contribution in the same Bradley Foundation-funded document by W. Bradford Wilcox and Kathryn Sharpe which claims that, “Strong, sustainable families pay long-term dividends to the entire economy.”

Unsurprisingly, the article provides no information about “strong, sustainable families” or “long-term dividends.” What it does is produce a simple table showing that married-couple-with-children households spend more on various things than single-childless households. If you’re thinking, “but there are more people in married-couple-with-children households,” then you may  already have done more thinking than the report’s authors.

To explain why this spending pattern occurs, they offer several reasons, the first of which is “household size.” Wait — you’re still thinking — if household size explains the difference in spending, then it’s not a difference in spending, it’s a difference in accounting, just pooling the spending of several people and calling it a spending increase. So how does this help “the economy”? Believe it or not, this is their reasoning:

To serve the needs of all the adults and children in their homes, they are more likely to buy many brands in bulk, from Bounty to Tide, and to fill their shopping carts at the local grocery store.

I must be doing something wrong, because I thought I spent less in the end when I bought in bulk.

The data abused in this report are from the Consumer Expenditure Survey, which is the authoritative source on household spending in the U.S., and used to calculate inflation. It’s something I’ve used before to study household spending (here and here). And if you use it, all I can say in a sentence is: you better account for household size, since all the spending is reported for households, not individuals.

To illustrate this, I took the data from their little table on (a) married-with-children households, and compared it with the sum of the spending for (b) childless-singles plus the (c) single parent households. If every adult needs one beer a day, and every child needs one glass of milk, then the level of spending in (a) and (b+c) should be the same, if they have the same number of children. This is not good science, but it’s appropriate for a blog-scale debunking. And the results:

This graph is for weekly expenses on small consumer items;* the graph for bigger ticket items looks about the same. If the dots fell along the dotted line, my beer-and-milk hypothesis would be supported. It’s pretty close — but tipping a little the way you would expect it to — toward bigger households spending less, since they have economies of scale (“buying in bulk”).

Anyway, the numbers are all junk. The more interesting question is: Is this farce or fraud? Maybe they really don’t know what they’re doing, in which case the foundation funding makes it a farce. Or maybe it’s fraud.** Maybe they are deliberately misleading the public, the foundation and the major corporations they are hoping will spend their “philanthropy” money on such “public education” projects, their actual recommendations!

Companies whose fortunes are linked to the health of the family, such as Procter & Gamble, spend billions of dollars each year on advertising. … Executives with oversight across brands should ask themselves a simple question: Do the messages used in our advertising make family life look attractive? Or do they exalt single living? Obviously, it’s in their long-term interest to do more of the former.

If you have another 3 minutes, consider watching this hilarious video they link to as an example of “family life = attractive.” It’s from Proctor & Gamble’s 75th anniversary in the Philippines (unless it’s a spoof, too), which includes images like this:

* cereal, baked goods, beef, pork, other meat, poultry, seafood, eggs, dairy, fresh fruit, fresh veggies, processed fruit, processed veggies, sweets, non-alch bevs, oils, misc. food, alchohol, tobacco, personal care products and services, and household products and services.

** colloquial use of the term “fraud” in this blogosphere context is not meant to express or imply legally criminal fraud.

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Filed under In the news

How much have you got to spend?

Kids cost more for parents who have more.

The U.S. Department of Agriculture has released its annual report on the cost of raising children. Using data from the Consumer Expenditure Survey, they estimate the costs for one year, then extrapolate out to 17 years with inflation (thus not including college and beyond). The methods are complicated, involving the costs of an extra room, economies of scale, food needs, and so on. It’s not just an exercise — the numbers are meant to be used as a guide for child support, foster care and education program budgets.

But the costs depend on how much money the parents have. That’s natural in a descriptive sense, but should it also apply prescriptively? In other words, are the needs of children really determined by the wealth of the adults who care for them, so their wellbeing is relative? In further words, who is children’s wellbeing for?

The report breaks families into married versus single, and then breaks the married-couple families into three pre-tax income groups. Here’s how the 17-year projections cost out.

I sorted the categories by something like their elasticity, that is, the ratio of rich-parent to poor-parent spending. So, food spending varies the least, so I put it on the bottom. Childcare/education spending varies the most — which is mostly because higher-income families have wives who work and earn more, and they spend more on childcare — so I put it on the top. Miscellaneous includes your video games, entertainment and so on.

Consider housing: rich parents spend more than twice what poor parents spend to add a room per kid (and in the model kids all get their own room). This is morally OK in a world where parents have a right to produce children of their own social status. But where does that leave the rights of children?

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Filed under In the news, Research reports